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Breaking: Binance to Acquire Rival FTX in Shocking Reversal
It appears that Binance will acquire rival FTX after a war of words between CEOs and crypto icons Changpeng “CZ” Zhao and Sam “SBF” Bankman-Fried.
The deal, which FTX’s Bankman-Fried called a strategic transaction, is still pending due diligence but will see Binance assist FTX with apparent liquidity issues. It represents one of the biggest deals in crypto history with billions on the line.
FTX customer’s will be protected with all assets covered 1:1 although it may take some time settle all debts, according to SBF. Meanwhile it appears FTX.us and binance.us will be unaffected by the transaction and continue to operate as usual.
Further details of the transaction were not disclosed.
Binance Lights Fuse by Liquidating FTT Token
The straw that broke the proverbial camel’s back appears to be FTX’s FTT token.
On Nov. 6 CZ Tweeted that Binance would be liquidating its FTTs tokens to manage risk and avoid another Terra-Luna situation, essentially fearing that FTX could be insolvent.
The news that a massive whale is going to liquidate FTT tokens obviously tanks the price of FTT.
CZ went on to say they wouldn’t support people who lobby against other industry players behind their backs (likely a reference to SBF’s consistent lobbying with the US government).
SBF immediately retorted that Binance was targeting FTX with false rumors and that the company was fine.
What followed from there was a cascading series of events that called into question FTX’s solvency and pitted SBF against CZ.
Finally in a shocking turn of events SBF announced a strategic transaction with Binance earlier today. CZ said they intended to fully acquire FTX help with the liquidity crunch although it would take time.
It’s particularly surprising considering that earlier this year FTX bailed out companies like Voyager Invest and even purchased a stake in popular online trading platform Robinhood.
What Now?
It’s unclear exactly what happens know.
FTX is one of the biggest players in the crypto exchange space and its unknown if it will simply be incorporated into the Binance portfolio.
It’s not even 100% this transaction will even go through as regulators will likely take a close look at one of the biggest crypto exchanges in the world being acquired by the biggest exchange.
The cryptocurrency markets have been understandably rocky since the news broke. Initially the price of all coins shot up but then immediately corrected and took a nose dive down.
At the time this article was published BTC was trading around $18,215, which represented a 12% drop. Altcoins have been hit even harder with Solana down 27% and the FTT token down a staggering 80%.
For now the only sure thing is that crypto remains one of the most volatile markets in the world and can still turn on the head of a dime.
The 2022 bear market has already claimed Celsius Network, Voyager, 3 Arrows Capital and Terra-Luna. Have we finally reached the bottom or will more companies fall before the end of the year?
We will have more on this story as it breaks.
